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AT&T deal to buy Iusacell won’t preclude AMX deal

AT&T deal to buy Iusacell for $2.5B won’t preclude AMX deal (RCR Mobile Minute)

AT&T surprised the wireless industry late Friday with news that it will buy Mexican operator Iusacell for $2.5 billion. The deal includes 8.6 million wireless subscribers, as well as all of Iusacell’s network assets, spectrum licenses and retail stores. Iusacell operates a 2G and 3G network using GSM/UMTS technology covering around 70% of Mexico’s population under the Iusacell and Unefon brands.

The deal was a surprise because many industry observers expected AT&T to buy a different Mexican wireless property. América Móvil (AMX) is being forced to sell its telecom infrastructure to comply with new Mexican regulations, and has reportedly invited AT&T to bid for the assets.

AT&T may still bid for América Móvil’s assets, according to analyst Jennifer Fritzsche of Wells Fargo, who notes that América Móvil’s “huge footprint” in Mexico could be even more attractive to AT&T as the owner of Iusacell. Analyst Kevin Smithen of Macquarie Securities also expects more activity from AT&T in Mexico.

“AT&T’s purchase satisfies IFETEL’s desire for a national new entrant who is committed to improving LTE infrastructure across the country,” he said in a research note. “As a result, we believe that IFETEL will now allow AT&T to acquire regional assets from AMX as IFETEL and President Pena Nieto have now secured national telecom competition and infrastructure investment for Mexico.”

If AT&T does try to buy the América Móvil infrastructure, that will be the carrier’s third major acquisition announcement this year. This spring, AT&T said it plans to buy DirecTV for more than $48 billion.

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.